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OUTSOURCING


A source of contention T


he NHS needs to save money. This is a fact which is not up for


debate. What is up for debate, however, is how the health service goes about saving that money.


One way to do this is through closing down certain NHS operations and outsourcing them to private sector providers who can carry them out more cost effectively.


Yet outsourced services within the NHS are highly contentious due to concern about the influence which private enterprise can have on the health service.


If commissioned effectively and in appropriate areas, however, outsourcing can improve services whilst driving down costs, according to Martyn Hart, chairman of the National Outsourcing Association


To get the most out of using an outsourced service, Martyn says that managers need to take an in-depth look at all of the functions and services provided by their trust and then decide which are most suited to outsourcing, in order for the maximum benefit to be achieved.


“Outsourcing can only save money when the outsourcer is doing something where the cost can be spread.


“It is an economies of scale business. So where NHS managers need to look are areas of their organisation that don’t have to be carried out by NHS staff such as accounts, HR and a variety of financial and


46 nhe


administrative functions which can be easily outsourced.


“However, things like cleaning don’t work well when outsourced because where can an outsourcer make economies of scale responsibly?”


“Managers have to ask themselves ‘what do we do?’ then break it down into what has to be done on-site - such as cleaning – and things that don’t. Of the things that don’t need to be done on site, managers need to establish what is core and needs to be carried out by our staff. Out of what is then left, managers need to ask – are we good at delivering those tasks? If not, is there another NHS service provider who could provide it at a better standard in a shared service agreement? If not, then is there a private sector provider who has a good track record who could help us?


Another area where outsourcing


can help is in accessing expensive services, such as HR. “Because there is always huge amounts of HR legislation being announced, trusts will need to have access to a lot of expertise to deal with it and if a trust procures HR as a function from an outsourcer then that expertise can be spread across hundreds, maybe even thousands of employees.


“This makes sense when it could prove extremely expensive to keep on hiring specialists on a regular basis to keep operations in house rather than taking advantage of the wide range of skills available to outsourced HR companies.”


Another benefit of using outsourced services is the speed with which it allows a trust to build capacity.


“If you do everything in house, when you do need anything and someone specialised in a


Whilst some view the private sector as having a negative influence on the NHS, outsourced services have a lot to offer when commissioned appropriately. National Health Executive spoke to outsourcing expert Martyn Hart to find out more


certain area you will have to go out and either procure or recruit yourself, whereas an outsourcer will often have either a service or specialist already on their books.”


One issue which has proved controversial is where work is done overseas, raising concerns around quality and the need to retain NHS jobs in the UK.


“One has to remember that outsourcing does not mean offshoring – outsourcing can happen without any need for concern over quality.”


So, given the benefits which outsourcing can offer the NHS, why is there so much resistance to the practice from many quarters within the NHS?


“Well, it’s the profit motive isn’t it? Put simply, private sector organisations have to make profits and then return those profits to shareholders who, amazingly, turn out to be unions quite often.


“The real issue is not the quality of service which the private sector provides because, after all, a company will want to deliver the best service possible so that it retains its contracts with the NHS, whilst also expanding its client base through recommendation.


“The issue here is around the skills and capabilities within the NHS to effectively write contracts and to lay out exactly what they want to get from a contractor. If you are very bad at this – and some parts of the public sector are – then you are not going to get what you want.”


Nov/Dec 10


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